Fidelity’s (LPS) Secret Deals with Mortgage Companies and Law Firms

Harris v. Fidelity National Information Services (In re Harris), Case No. 03-44826-H4-13

Via Credit Slips 2008

Last week, (January 2008) a class action lawsuit (Harris v. Fidelity National) was filed against Fidelity National Information Services,(LPS) a huge player in the billion dollar world of mortgage servicing. “What? I’ve never heard of them,” you say. Fidelity is the company that provides default servicing to most of the large residential mortgage servicers. Their role is a shadowy one; unless you’ve delved deeply into how consumer mortgages are serviced, you probably weren’t aware of their existence–much less how they may be driving up costs for consumers. Foreclosure petitions, proofs of claims, and bankruptcy court motions never bear Fidelity’s name (instead they are signed by the regular servicers or by local counsel retained by the servicers.) But despite its invisibility, Fidelity is almost always part of the action in foreclosures or bankruptcy cases.

The lawsuit alleges that Fidelity receives illegal kickbacks from attorneys who work under contract with them. The exhibits to the class action are clear. Fidelity bills its clients–the servicers–for certain fees– for example, $100 to review a bankruptcy plan. The servicer includes those fees as due and owing on bankruptcy proofs of claims, many of which appear only as “attorneys fees” or “postpetition charges.” However, Fidelity requires attorneys to let it “retain” $50 of that $100. Fidelty characterizes these as “admin fees” paid by the attorney to Fidelity. The big problem with this practice is that bankruptcy law requires full disclosure of where the debtor’s money is going. If the service is getting the debtor to pay these fees, the bankruptcy court should be approving those charges and who is going to receive the debtor’s money. At least, that’s how the class action has framed the legal issues in the case.

One final note: the schedule of Fidelty’s fees includes a line item for “Drafting Missing Documents.” Hmmmm . . . If documents are missing, they are missing. I don’t see how “drafting” can appropriately play into this. It sounds like more evidence of “recreating” mortgage servicing documents

The Fidelity National Network agreement attached as an exhibit to the below case offers their network of foreclosure mill attorneys the service of  “Drafting Missing Documents.”

Harris v. Fidelity National  : Harris v. Fidelity National Information Services (In re Harris), Case No. 03-44826-H4-13 (Adv. No. 08-03014) (Bankr. S.D. Tex.). Currently assigned to Judge Jeff Bohm. The debtor’s attorney who filed the complaint is Johnie Patterson.


Fidelity’s (LPS) Secret Deals with Mortgage Companies and Law Firms
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2 Responses to “Fidelity’s (LPS) Secret Deals with Mortgage Companies and Law Firms”
  1. marilyn lane says:

    I am in a two year legal battle in NYSC WITH racketeers at Fidelity National Title.

    In September 2008 Astoria Federal S & new attorneys stated in Astoria Federal S & L/Successor-in-Interest to Fidelity NY FSB vs. Marilyn Lane “It is Indemnify, Indemnify, Indemnify. We are stepping aside and the title companies are stepping in.

    Thomas Malone corrupt attorney for Fidelity National Title and David K Fiveson corrupt attorney representing Coronet Title did not want to Indemnify but want to be Intervenors instead and be heard and what they told the Court is time makes forged deeds good. A FORGED DEED CONVEYS NO TITLE

    Ij wrote a simple letter to Mr. William P Foley II Chairman of the Board of Fidelity National Title ” how come Fidelity National Title’s New York attorney Thomas Malone finds himself fighting for a forged deed?
    Their reponse to me was it is proper to fight under the circumstances (the circumstance was they knowingly insured a FORGED DEED.

    With Wm Foley at the helm of Fidelity National Title and all its other named enterprises you know why it is said THE FISH ROTS FROM THE HEAD DOWN.

    with Foley at the helm of Fidelity National Title


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  1. […] And signatures authorizing the transfers make fun reading. Some people listed as vice presidents and the like often are not, and were never even employees of the companies named. They work for companies that are hired to create the documents. […]

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